Man Group says price of absorbing research costs can go up to $15m

Man Group has revealed that the decision to absorb research costs following the implementation of Mifid II will have a $10-$15 million (£7.5 million-£11.3 million) impact on pre-tax profit.

The company said that the figure, estimated for 2018, includes previously highlighted administration costs.

The news was accompanied by a trading statement which revealed a 28% in funds under management year-to-date to $103.5 billion at 30 September. This was driven by net inflows in the quarter of $2.8 billion as well as positive investment movement of $3.3 billion.

GLG has also experienced growth with funds under management going from $26.6 billion to $32.9 billion year-on-year.

The company also announced its intention to purchase $100 million of shares, and continue to review acquisition opportunities.

Chief executive Luke Ellis said: ‘The third quarter of 2017 was a period of strong alpha generation for Man, with positive performance across the firm. As expected the pace of inflows and the level of margin compression both moderated during the quarter. Inflows remained strong overall and were focussed on some of our newer strategies, in particular alternative risk premia. We devote significant efforts to developing innovative solutions, and we are pleased to see our clients' enthusiasm for these newer offerings.'

Many other asset managers have been announcing recently whether or not they intend to pay for third party research or charge it to clients through a research payment account.

Among those that decided to absorb the costs are Artemis, Aberdeen Standard and Jupiter.

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